here we are another beautiful afternoon on our balcony isn't it absolutely beautiful we're gonna
be in for a really hot weekend we're off yes we are enjoying a heatwave at the moment well this
is July and it's been a great run of weather it's beautiful so we thought we would respond
to some of the comments so we've been getting in the last two videos you know that we attempted
to explain F.I.R.E. to everybody which was the "Financial Independence Retire Early" concept
and some people were asking us how we did it haven't they did yeah they were asking if we
could share our story a little bit more about how and when we started so we thought we would
tell you about that today so it's especially relevant for younger people as well because it
all started when I was 38 and we decided to get serious about saving and investing money that's
right so it was fortuitous because I've read many self-help books and financial books and they're
all pretty dry didn't get your interest did they Norm well the finance ones were complicated and
and went into way too much detail yeah not very easy choice anyway there was a book that we and
that had just launched a year or so before I was 38 we came across it and it was called the
Wealthy Barber and it's a Canadian author yes what a great book and it was totally different
from the point of view of financial planning the book was a story it was a story of a small town of
a young man who'd gone back there with his young family to visit his family and it is just a very
nice story but every chapter tells the story of financial planning and it made so much sense to
us hmm for the first time we really understood it didn't we we kind of read it and thought we can do
that totally we could didn't we so the the first concept that I think it was David Chilton who
wrote the book his first concept was pay yourself first if you could save something like 10 percent
of your salary that you make as it comes into your bank account and you have it automatically debited
to an investment then you never miss the money as especially after a few months of doing it so
we set up a standing order of ten percent of each of our pay to go to a mutual fund and then that
brought on another concept which was dollar cost averaging so what we did is had the mutual fund
company buy stocks in the selected mutual funds that we chose every month from our standing order
one thing we did find was after a few months you just totally forget that this money is going into
your saving because you're so used to it the the money's gone well and then you just spend with
what's left and it didn't really take us very long before we got into the swing of not even
missing the money didn't know but we knew that it was really the start of our ladder wasn't it so
once we've done that we would also bought a house recently when I was 38 so we had a mortgage and
in Canada were very fortunate that the mortgages can be prepaid without penalty so one of the other
concepts was to accelerate our mortgage payments Norm that was another new thing we found out about
wasn't it was accelerating mortgage payment and we did that I as most people know everybody starts
off paying monthly and then we found out that you can pay bi-weekly and this was new to us but what
it actually meant was you actually paid them more money overall in the year you would end
up with 26 payments which gave you a month more of mortgage payment so you're making 13 monthly
payments in 12 months and then we also found that trimmed about five years off our mortgage
just yeah we were really surprised just how much just making that change from monthly to bi-weekly
how much money it actually saved us and then the mortgage company or the bank that we had it
allowed you once a year to increase your payment by 10% so I thought to gently he did so that was
another form of forced savings so they would also allow you to repay 10% of the outstanding mortgage
amount if you had the capital yeah if you were lucky enough to have that excess money floating
around we never did we lived paycheck to paycheck but we did do the increasing bit by the 10 percent
and we found that relatively easy to do so we had two bits of financial planning going on paying off
our mortgage quicker and investing in mutual funds yeah and then with accelerating everything to do
with the house to be paid off quicker that was great so after about 10 years it became
obvious that the mutual funds weren't brilliant investments for that period of time we're talking
about the late 90s early 2000s and the in Canada again we had a very expensive MER and management
expense ratios for the mutual funds so as they lost our money in the investments they also paid
themselves first from our investments you know they were looking after themselves first right
so we thought we could do a better job ourselves so we started liquidating some of those mutual
funds transferring them to a stock account where we bought dividend stocks and so that opened up
another level of investment where we're getting dividends quarterly that's work really well for us
hasn't it it has we tend to pick the very strong ones don't we sort of like Banks and things that
have been around for a long time so anything that was available to us to help us with our limited
funds such as the accelerated mortgage payments the pay yourself first we also took advantage of
the registered retirement savings plan that there is in Canada so we would get a tax break on the
money we put in which directly reduced your tax at tax time so we had those going in the background
as well and initially they were mutual funds and then we converted those over to dividend stocks
although we did keep some mutual fund accounts for diversification and that's pretty much how
we got started with the idea that we would like to retire early not have to work to 65 or 70 we
both had jobs without pensions so we just knew there wasn't gonna be a company pension for us
so we knew we would have to look after ourselves but the one thing that we always had as our main
thing was the house wasn't it they were as well as everything else we knew that if we could pay the
house off then when we wanted to sell it and we obviously as you know we did that now five years
ago yeah that was one of our previous videos so when we sold the house it is allowed us to retire
early but going back that was you know our story stories started when you were 38 wasn't it yeah
I'm really find a book that we could understand on finances so really when they you know if you're in
your 30s or 40s even late twenties it could it's all good things that could just get you started
isn't it we'll try and find a link to the wealthy barber book put it in the description down below
yeah we're not sure if it's still in print or not or whether you could get a secondhand copy I'm
sure probably but it's a great read for a younger person it's very easy to follow it is so we're
still on F.I.R.E. so it seems we're wearing a fiery shirt you are yeah we are and the wonderful
thing is that we're now reaping the benefits from everything we've done and we're really
enjoying our life now aren't we so those decisions that we made when I was 38 allowed me to retire
at 55 obviously we took our time doing it but I really did enjoy working at the time and and an
opportunity came along when I was in my 50s Tina took hers a few years later yeah I guess I was 58
wasn't I and to be honest with you if we knew that retirement was this amount of fun we would have
retired first and he never bothered with working because the funny thing is like we have so much to
do at the moment we're so busy doing the stuff I don't almost don't even know how we managed
to go to work no because we're so busy doing your business doing YouTube we do hobbies or go
swimming we go away we travel it is amazing so it is so anyway we're just to update everybody where
today have moved into stage 3 of opening oh yeah this is a big thing for us isn't it in a region
of Ontario so we're gonna keep an eye on that see how that progresses but it looks like restaurants
should be opening and maybe gyms and things and groups slightly bigger numbers getting together
so we just like to say thanks to everybody who watched the last couple of videos of our attempt
at giving some financial accounting of how we do it well financial help - yeah we're not financial
advisors we know don't take our word for anything financial it's it worked for us but it might not
work for you yeah but it also might help other people too we're hoping so yeah so anyway thanks
for watching have a great weekend and we'll catch up with you again see you that's great bye bye
you